Saturday, April 18, 2009

The News:

Paul Volcker, senior economic adviser to President Barack Obama, said on Saturday that the U.S. economic recovery will be a "long slog" but that the rate of decline "is going to slow."

Volcker said a review the Federal Reserve's role, something traditionally regarded as taboo, now seems inevitable given the fallout from the long-running financial crisis.

"For better or worse, we are at a point where the Federal Reserve Act is going to be reviewed," said Volcker.

The wide range of proposals, from giving the Fed much more supervisory authority to stripping it of part of its current authorities, "are just an indication of how wide open that question is going to be."

My View:

This is something that had to happen given the circumstances. Whatever the mainstream media says, the actual root cause of this entire problem is loose policies of Fed (the recent one was Greenspan's irresponsible "too low too long" interest rate policies).

There can be many interpretations of Volcker's statement and its actually more confusing than the uncertainty of economy. I have two assumptions:

They are contemplating INCREASING the powers of Fed to the level where the Fed have extreme power. I think this will be the last thing required and if its true then the so called freedom in US of A will become a history chapter. It will be like a kingdom ruined by a monster giving it the state powers with honor and praying that the monster having more powers will save the kingdom!

They may be thinking of stripping the Fed's powers in the effort to make it less powerful. This may sound like a good idea but what if the motive behind this is to create a more powerful and bigger govt?

So, in my opinion, either way this is going to be tough - tough for "the Free Citizens".